• Journal of Labour Economics
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• v.38 no.2
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• pp.25-58
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• 2015

This paper compares income and consumption inequalities in Korea and applies the permanent income hypothesis to interpret the linkage between the two inequalities. Income inequality has been increasing since 1990 while consumption inequality had been decreasing until the early 2000s when the two inequalities started to co-move. Permanent income hypothesis explains reasonably well the consumption pattern in the recent period, which reflects the increased access to asset markets by the Korean households. Consequently, the co-movement of income and consumption inequalities in the recent period implies that inequality in permanent income components are fluctuating.

• Journal of Digital Convergence
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• v.13 no.12
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• pp.31-39
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• 2015

This paper examines trends of the income inequality index and the income quintile share ratios, using the Household Survey released by Statistics Korea. We discuss their respective effects on total income inequality and the income disparity, as a contribution concept defined in this paper for 1990-2014 periods. Main findings are as follows. First, the contribution of 2-person families to total inequality with the current income or the disposable income becomes bigger, and growth rates have been above 10% since 2003. Second, the contribution of 1-person families to income inequality is greater than that of 2-person families. Policy implication is such that the government had better investigate the 1 or 2 person families in-depth to set up the policy measures for weakening the income inequality.

• International Area Studies Review
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• v.15 no.3
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• pp.191-213
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• 2011

This study empirically examines whether income smoothing effectively contributes to consumption smoothing. Since international factor movement plays an important role for income smoothing across countries, net factor income across countries deserves more attention in considering income smoothing than attention having been paid by previous studies in the literature. Most of previous studies assume that net factor income has the same degree of effects on consumption as GDP. For the case of 12 EU countries during the period from 1999 to 2010, our empirical investigation observes that the response of consumption with respect to net factor income is severely lower than the response of consumption with respect to GDP, and further net factor income has ignorable effects on the consumption. This evidence implies that the income smoothing via international factor movement is less significant in contributing to the consumption smoothing. In the sequel, our finding suggests that legal and institutional process for transferring net factor income across countries should be eased further to improve contribution of income smoothing to consumption smoothing.

• Journal of the Economic Geographical Society of Korea
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• v.17 no.3
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• pp.502-516
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• 2014

This study has decomposed the Gini coefficient using Korean Labor & Income Panel Study data and empirically analyzed the impact of demographic characteristics and source-specific income of householder on the household income gap using panel analysis. The scope of areas were divided into 'nationwide,' 'metropolitan areas,' and 'non-metropolitan areas,' and the period before and after the global financial crisis was examined. The analysis findings are as follows. First, when the entire period was examined by income source using Gini decomposition with division of areas into 'nationwide,' 'metropolitan areas,' and 'non-metropolitan areas', the following results were revealed. The absolute and relative contribution level of property income to the gross income was the largest in the category of 'nationwide' and 'metropolitan areas,' while the contribution level of earned income was the largest in the category of 'non-metropolitan areas'. In addition, property income worsened the household income gap the most in the category of 'nationwide' and 'metropolitan areas.' Second, property income worsened the household income gap less after the financial crisis than before the crisis. It is probably because the price of real estate skyrocketed before the global financial crisis, worsening the household income gap, whereas the price drop after the crisis temporarily alleviated the gap. Third, a correlation analysis revealed that households with older householders whose education is high school graduation or below had relatively low gross income, and households with higher source-specific income, especially earned income, had relatively high gross income. Fourth, when the household income determinants were compared through panel analysis with division of areas into 'nationwide,' 'metropolitan areas,' and 'non-metropolitan areas,' the following results were obtained. While the impact of earned income, financial income, and other incomes was greater in non-metropolitan areas than in metropolitan areas, the impact of property income was greater in metropolitan areas than in non-metropolitan areas. To reduce the income gap, the government should impose higher taxes on the high-income class and provide tax benefits to the low-income class, with efforts to create a wide variety of jobs. In addition, since income inequality gets worse as the proportion of incomes generated through asset holdings becomes higher, the government should focus on stabilizing property prices while paying attention to the regional differentiation when carrying out related policies.

• KDI Journal of Economic Policy
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• v.25 no.2
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• pp.55-88
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• 2003

When the definition of income and the equivalence scale was applied just as it was in the LIS (Luxembourg Income Study), the adjusted disposable income inequality calculated by Gini coefficients in Korea was 0.358 for the year 2000. Compare to the 1996 figure of 0.298 the increase of income inequality has skyrocketed. In addition, the adjusted market income inequality increased from 0.302 in 1996 to 0.374 in 2000. The disposable income inequality ranked the third and the market income inequality ranked at the mid level in 2000 among OECD countries. One significant finding in this paper was that the difference between the disposable income inequality and market income inequality in Korea is very small compared to those of other OECD countries. The relative poverty ratio, which is calculated by using 40% of the medium income bracket of the disposable income was calculated at 7.6% in 1996 and 11.5% in 2000. The poverty ratio in 2000 for Korea ranked one of the highest in OECD countries, also.

• Journal of Labour Economics
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• v.30 no.3
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• pp.77-102
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• 2007

This paper compares income and consumption for their relative effectiveness in measuring inequality. Although income inequality has received more attention in the literature, the permanent income hypothesis links consumption to welfare more directly than income. To the extent economic agents smooth their consumptions, consumption inequality is a better indicator for an economy's welfare inequality, and it is especially so when income volatility is high. The empirical analysis in this paper indicates that the income and consumption patterns among the Korean wage/salary worker households are quite consistent with the permanent income hypothesis. Further, it is found that consumption inequality tends to be lower than income inequality, and more importantly, that the two inequalities do not always vary in the same direction. These results call for stronger emphasis on consumption inequality in inequality literature.

• Journal of Labour Economics
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• v.35 no.2
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• pp.43-77
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• 2012

This paper investigates how individual labor income is determined by initial conditions - such as educational attainment, age, and sex - and all the other conditions. Using KLIPS (Korea Labor & Income Panel Study) database, the paper finds, first, that over the period of 1998-2008, cross-sectional income distribution has deteriorated for the whole sample but not within each age group. Second, income mobility defined by the relative importance of initial conditions in individual income disparities has moderately increased in most age groups.

• Korean Journal of Social Welfare
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• v.55
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• pp.181-204
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• 2003

The purpose of this study was to offer a comprehensive analysis of the changing trends of the Korean income packaging, poverty rate, and level of income inequality from 1996 to 2002. In order to do that, this study used the micro-data of "Income and Expenditure Survey of Urban Households" by the National Statistical Office(NSO). Major results were as follows: (1) A ratio of public transfer in family income packaging increased at the DJ administration. (2) Poverty rate and Gini coefficient, which were 7.8% and 0.29 in 1996, rose to $8.8{\sim}10.4%$ and $0.30{\sim}0.34$ respectively during the year of 1998-2002. (3) However, poverty reduction effect and income inequality reduction effect of public income transfer increased preferably at the DJ administration. Those effects increased more since the enactment of National Basic Livelihood Security in 2000. Therefore, government should provide more national welfare programs to reduce the poverty rate and to improve better structure of income distribution.

• Korean Journal of Social Welfare
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• v.56 no.2
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• pp.5-27
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• 2004

This study estimates the role of public and private income transfer to the income status of women who experienced marital disruption. In detail, this study estimates five major subjects (1) women's socioeconomic background, (2) income and poverty status, (3) family income composition, (4) the anti-poverty effect of public and private income transfers, and (5) factors associated with women's poverty status. Major findings of the study are as follows: First, women's socioeconomic characteristics, income status, and poverty status are different according to what types of marital disruption (separation, divorce, death of spouse) they experienced. Second, the role of public and private income transfers to reduce women's poverty are also different according to their marital status. Third, widow's working condition and the level of public assistance are significantly associated with the poverty status of widow.

• Industry Promotion Research
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• v.5 no.3
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• pp.23-29
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• 2020

In order to enrich the lives of senior citizens, this study suggested measures to increase income for the elderly by strengthening the current income security policies. Income security is a policy that guarantees income to maintain a certain standard of living. It is a policy that guarantees income to maintain a certain standard of living when income is suspended due to unemployment, disease, or disaster, or when income is lost due to retirement or death of a dependent due to old age, or when expenditure accompanying birth, death, etc. occurs. According to the study, measures to expand old-age income security are as follows. First, a phased increase in basic pension for the guarantee of old-age income is needed. Second, the income security function of the National Pension Service should be further strengthened. Third, a multi-layered old-age income security system should be established. Fourth, the government should continue to push for the expansion of works for the elderly. In conclusion, in order to strengthen the income security policy for the elderly, a reexamination of the current income guarantee system for the elderly is needed first. Then, it will be necessary to propose measures to gradually guarantee income for the elderly.